Foreign debt is a subset of the financial obligations that comprise a country's international investment position. It includes all the non-equity components of the net international investment position, that is, all recorded assets and liabilities other than equity securities and direct investment equity capital, including reinvested earnings.

The level of borrowing and other non-equity liabilities of Australian residents at a particular date make up Australia's foreign debt liabilities. The level of Australian lending abroad and other non-equity assets at the same date are deducted from the level of borrowing to arrive at Australia's net foreign debt.

The level of net foreign debt at 30 June 2002 was $329.8b, up $16.3b (5.2%) on 30 June 2001. The increase during 2001-02 resulted from net financial transactions of $35.3b, price changes of -$3.8b, exchange rate changes of -$14.2b and other adjustments of -$1.1b (table 30.13).

At 30 June 2002, the net foreign debt of the public sector (general government plus public financial and non-financial corporations) was $12.1b, which accounted for 3.7% of total net foreign debt. Net foreign debt levels of private financial corporations and private non-financial corporations were $251.7b (76.3% of total net foreign debt) and $66b (20.0%) respectively (table 30.13).

30.13 LEVELS OF FOREIGN DEBT - At 30 June

1997

1998

1999

2000

2001

2002

$m

$m

$m

$m

$m

$m

Foreign debt assets(a)

-94,218

-119,189

-129,150

-143,967

-185,304

-193,891

Public sector

-31,048

-41,329

-40,770

-44,876

-63,350

-56,220

General government

-2,836

-8,095

-9,378

-9,219

-10,338

-10,869

Financial corporations

-26,853

-32,196

-30,470

-35,263

-46,069

-42,851

Reserve Bank

-22,164

-23,998

-22,883

-27,184

-36,958

-35,053

Central borrowing authorities

-8

-179

-385

-1,090

-1,426

-954

Other financial corporations

-4,681

-8,019

-7,203

-6,990

-7,685

-6,845

Non-financial corporations

-1,359

-1,037

-922

-393

-6,943

-2,499

Private sector

-63,170

-77,860

-88,380

-99,091

-121,953

-137,672

Financial corporations

-45,619

-58,762

-66,328

-75,444

-92,788

-107,601

Non-financial corporations

-17,552

-19,098

-22,052

-23,647

-29,166

-30,071

Foreign debt liabilities(a)

302,846

346,971

359,839

421,771

498,775

523,654

Public sector

96,278

86,721

75,279

63,445

68,950

68,366

General government

42,549

38,463

32,373

22,872

24,100

25,066

Financial corporations

48,213

41,392

37,284

34,001

32,343

29,604

Reserve Bank

72

48

40

34

49

43

Central borrowing authorities

40,203

36,571

32,772

29,060

27,622

25,515

Other financial corporations

7,938

4,774

4,473

4,907

4,672

4,046

Non-financial corporations

5,516

6,866

5,622

6,572

12,506

13,696

Private sector

206,568

260,250

284,560

358,326

429,825

455,288

Financial corporations

145,415

187,507

209,734

271,377

328,896

359,259

Non-financial corporations

61,153

72,742

74,825

86,949

100,929

96,030

Net foreign debt

208,628

227,782

230,689

277,804

313,472

329,763

Public sector

65,231

45,392

34,509

18,569

5,599

12,147

General government

39,713

30,368

22,995

13,652

13,762

14,197

Financial corporations

21,360

9,196

6,814

-1,262

-13,726

-13,247

Reserve Bank

-22,092

-23,950

-22,843

-27,150

-36,909

-35,010

Central borrowing authorities

40,195

36,391

32,387

27,970

26,196

24,561

Other financial corporations

3,257

-3,245

-2,730

-2,082

-3,013

-2,798

Non-financial corporations

4,157

5,828

4,700

6,179

5,563

11,197

Private sector

143,398

182,390

196,179

259,235

307,872

317,617

Financial corporations

99,796

128,746

143,406

195,933

236,109

251,658

Non-financial corporations

43,602

53,644

52,773

63,302

71,764

65,959

(a) Foreign debt levels between direct investors and direct investment enterprises are recorded on a gross basis for assets and liabilities.

Source: Balance of Payments and International Investment Position, Australia (5302.0).